Housing Prices

European and Asian shares rise along with a jump in S&P futures which are pointing to a solidly green open on US payrolls day. The dollar, trading somewhat weaker against the euro was stronger against the yen, and was on track for its firth week of gains, while the rout in global Treasuries continued following a Mario Draghi conference that was interpreted as more hawkish than expected.

Population growth, economic growth, and resultant energy consumption are inexorably slowing. The Federal Reserve knows it can not stop this and is simply slowing the inevitable with interest rate cuts to incent greater consumption via skyrocketing credit/debt...

Housing bubbles are showing signs of bursting all over the world and are particularly evident in the US, Canada and Australia. With bubbles now at the peak of popping in several parts of the world, the coming collapse could make the US crash of 2007-2009 look like a warm-up act.

Between China's housing minister admitting the local real estate market is in a bubble, and China planning to implement property taxes, what has until recently been a trickle of selling will likely turn into a flood soon, and is the reason why Axiom's Gordon Johnson is warning to sell steel and iron ore immediately.

"It is possible that continuing rises in indebtedness, partly as a result of low interest rates, increase the fragility of household balance sheets. If so, then at some point in the future, households having decided that they had borrowed too much, might cut back consumption sharply, hurting the overall economy."

While Trump seemingly remains the only topic worthy of discussion blanketing the airwaves, as the following chart from Goldman demonstrates, it has been China where policy uncertainty has stealthily exploded in the past three months.

"Some economic or financial shock could hit us, from within the U.S. economy or from outside. If we are surprised by higher inflation than we currently expect, we might need to raise rates more aggressively. Some argue that gradual rate increases are better than waiting and having to move aggressively."

Given the multiplying and shrilling-squawking omens of hubris and overconfidence in today's hyper-extended markets -- a murder of complacencies, if you will -- we conclude we've reached the point in this storyline where the suspense has risen to its zenith, and the real violence then begins.